Civic energy collectively defines municipal, community, mutual and citizen ownership within the energy system. In recent years the civic energy sector has grown dramatically. This change has been driven by a desire to revive local economies, reduce costs to energy users, and increase the share of energy generated from renewable sources. Drawing on a transdisciplinary analysis of a civic energy transition pathway in the UK, this paper explores which technological and institutional challenges need to be surmounted for the civic energy sector to thrive. In particular the interaction between existing market structures and new electricity supply business models are investigated. This paper builds on a series of elite semi-structured interviews and evidence synthesis workshops held by interdisciplinary researchers within the Realising Transition Pathways, and iBUILD research consortia. These workshops and interviews examined the implications of moving towards a more distributed civic–led energy system, and business models compatible with that transition. Significant insights were derived from this research, such as the feasibility of the transition, the opening up of new forms of finance, the important role of interconnection, storage and demand reduction, and the need for a more regional and local approach to energy. This work also demonstrates the importance of political economy in understanding the needs of the civic energy sector in different countries, and highlights a research process for investigating civic energy business models in other liberalised and unbundled markets.